Your age question

[trainer]

Keep it coming people Im learning alot ...so far I cant retire because they take 85% of my social, if I get say 2000 a month 4000 is for me and 20,400 will be takened after taxed how will I live on this?

 

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[Emil W]

Keep it coming people Im learning alot ...so far I cant retire because they take 85% of my social, if I get say 2000 a month 4000 is for me and 20,400 will be takened after taxed how will I live on this?

I think you misunderstand the tax law. They will not take 85% of the total amount you have received in SS payments. (That's what I think you're saying, please correct me if I'm wrong, maybe I'm misreading your post)

But they will tax you on up to 85% of your SS received if your total income--not including SS--is more than $34,000 for an individual, or $44,000 for a couple. If your income is less, they tax a smaller percent. And if your income is less than $25,000/year for an individual or $32,000 for a couple, there's no tax owed.

If you collected a total of $24,400 total for the year, they would potentially tax as much as 85% of that total, or $20,740. So you would then potentially have to pay tax on $20,740--it doesn't mean you have to pay them $20,740.

How Are Social Security Benefits Taxed?

If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you pay federal income on your Social Security benefits.

www.aarp.org

 

[Heavygold4me]

In Mississippi its my understanding that Ssi is not taxed at the state level, however it is on the federal level

 

[relicmeister]

Excellent thread. I intend to make an appointment at SS agency for a consultation and also try to speak with a private sector financial planner that knows SSI through and through. Does anyone know if Pennsylvania taxes SS income at the state level or it’s just federal tax I have to contend with? Thanks

 

[fistfulladirt]

Retired at 58 two years ago after 40+ years of employment. The Fortune 500 company I’d been with for 25 years gave me (and all my co-workers) an ultimatum and I opted out. They were very generous, gave me a year’s salary and full pension and 401K, plus bought me a chest freezer full of beef and a sweet $500 outdoor sound system lol! I haven’t touched my retirement funds yet, my wife is working from home for the state, and my last kid will be leaving home in March. I’ll be taking SS at age 62.

 

[relicmeister]

I’m 45 years and counting at my company and in my profession. I’ll start getting benefits at 661/2 in October 2023 but keep working for 8 more years health permitting. By then I’ll have worked in the same company
( athough different parent company) for a whopping 53 years. Then I can metal detect to my hearts content.

 

[dieselfool]

Man, a lot of old geezers metal detect, I guess. I retired at 65. I was going to retire at 62 but I was so busy (self-employed) that I forgot about it. It is nice to see the money automatically show up but I remind myself of all the money I paid in since 1972.

 

[FreeBirdTim]

Don't wait too long or you may never collect anything. I've had a few relatives that died before they collected a penny in SS. Seems like a waste to pay in all those years and never get any of it back. My father was smart and retired at 62. He collected for almost 19 years and received over half a million in payments during that time.

Social Security wants you to work until your 67 or 70 or whatever. The longer you work, the fewer years they have to pay your pension. Another problem with working until your 67 or older is your health. Work too long and your health starts to go down the drain. Hard to enjoy your golden years if you can't walk or are incontinent all the time...

 

[relicmeister]

Don't wait too long or you may never collect anything. I've had a few relatives that died before they collected a penny in SS. Seems like a waste to pay in all those years and never get any of it back. My father was smart and retired at 62. He collected for almost 19 years and received over half a million in payments during that time.

Social Security wants you to work until your 67 or 70 or whatever. The longer you work, the fewer years they have to pay your pension. Another problem with working until your 67 or older is your health. Work too long and your health starts to go down the drain. Hard to enjoy your golden years if you can't walk or are incontinent all the time...

Some believe and I think it’s often true that the earlier you retire, the sooner your health begins to decline, because you can become lazy or lose a sense of purpose in your life. Another reason to keep working as long as possible is insurance. If I were on the Medicare my wife would be without coverage and she’s only 53. Plus I have a great life insurance through work that would be way too expensive on my own.

 

[FreeBirdTim]

I'm a numbers guy, so here's the numbers. Just using an example posted on the SS website. For example, if you retire at 62 and your pension is $750 a month, it would have been $1,000 a month at 66 and $1320 a month at 70. So working to 66 or to 70 looks like a much better deal, right? Wrong.

If you retire at 62, you would have collected $36,000 in monthly benefits when you turned 66. Since you only collect $250 a month more at 66, you would have to live to age 78 just to make up the $36,000 you lost by not retiring at 62.

And if you retire at 62, you would have collected $72,000 in monthly benefits when you turned 70. Since you only collect $570 a month more at 70, you would have to live to age 81 just to make up the $72,000 you lost by not retiring at 62.

I know you'd have to factor in the cost of life and health insurance, but working until you are feeble or die doesn't make sense to me. Trust me, by the time you hit 70, you'll have many health issues that will limit what you can do in life. Just my take on it from someone who had 18 aunts and uncles! I saw what Father Time did to them, one by one. Most lived to their late 70's or early 80's, but they all had various ailments that affected their lives. They had strokes, heart attacks, cancer and so on in their late 60's. Enjoy life while you can because it's no fun when you're sick. As they say, if you have your health, you have everything.

 

[SeabeeRon]

I retired at 58, started collecting SS at 62 and my overall health has improved being away from the work stress!

 

[newnan man]

I'm a numbers guy, so here's the numbers. Just using an example posted on the SS website. For example, if you retire at 62 and your pension is $750 a month, it would have been $1,000 a month at 66 and $1320 a month at 70. So working to 66 or to 70 looks like a much better deal, right? Wrong.

If you retire at 62, you would have collected $36,000 in monthly benefits when you turned 66. Since you only collect $250 a month more at 66, you would have to live to age 78 just to make up the $36,000 you lost by not retiring at 62.

And if you retire at 62, you would have collected $72,000 in monthly benefits when you turned 70. Since you only collect $570 a month more at 70, you would have to live to age 81 just to make up the $72,000 you lost by not retiring at 62.

I know you'd have to factor in the cost of life and health insurance, but working until you are feeble or die doesn't make sense to me. Trust me, by the time you hit 70, you'll have many health issues that will limit what you can do in life. Just my take on it from someone who had 18 aunts and uncles! I saw what Father Time did to them, one by one. Most lived to their late 70's or early 80's, but they all had various ailments that affected their lives. They had strokes, heart attacks, cancer and so on in their late 60's. Enjoy life while you can because it's no fun when you're sick. As they say, if you have your health, you have everything.

That is an excellent way of viewing SS retirement. Some problems to consider though. You cannot get Medicare until 65 which means you have to work somewhere usually to get decent benefits. Working cuts into you SS amount if you take it before 66-1/2. So you get a lot less if you work. Once you reach 65 and can get Medicare you may as well hang on another year and 1/2 & draw your full amount. You can stop working or keep working and there is then no penalty other than you'll owe a little more in taxes. I think too, family medical history & health comes into play. My family on both sides all live into their 90's with relatively good health. My grandmother was 106, 3 aunts all over 100. So for me 62 was too soon. Lot's of factors to consider, everyone is unique

 

[Kormak]

I think you misunderstand the tax law. They will not take 85% of the total amount you have received in SS payments. (That's what I think you're saying, please correct me if I'm wrong, maybe I'm misreading your post)

But they will tax you on up to 85% of your SS received if your total income--not including SS--is more than $34,000 for an individual, or $44,000 for a couple. If your income is less, they tax a smaller percent. And if your income is less than $25,000/year for an individual or $32,000 for a couple, there's no tax owed.

If you collected a total of $24,400 total for the year, they would potentially tax as much as 85% of that total, or $20,740. So you would then potentially have to pay tax on $20,740--it doesn't mean you have to pay them $20,740.

How Are Social Security Benefits Taxed?

If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you pay federal income on your Social Security benefits.

www.aarp.org

So you will get taxed only if you recieve income from somewhere else to reach those $44,000? Haven't looked into all of those things yet, but never hurts to do a little research.