Home Forums Hunting & Shooting Hunter's Campfire Social Security question

I’ve been drawing SS since last March. Is Uncle Sam going to send me a W-2 form for tax time??


Thank you

yes

Ain't nothin' from the G'vmt free.

tax on ss? I assumed i am done with it.

Oh yes?

Did y'all pull SS as soon as you were eligible for full amount? My finance guy is encouraging me to wait as long as possible to get as much as I can. He considers it a sure investment.

Close to a W-2 but it's called a 1099-SSA, I believe. I'm handling my aunt's estate and I've already got hers.

Yes, they tax the SS if you make too much money.

That seems to be a common recommendation. Unless you know how long you will live, you can’t be certain when to take SS to maximize your benefit.
I started mine two years ago, age 66.

My wife and I both started drawing our SS at full retirement age (66). We debated holding off, but you never know how long you will live and it takes many years to recover what you gave up, even at the higher rate.
I'd rather have the extra money while I'm young enough to use it to enjoy life.
My wife is a retired Certified Financial Planner, knows the ins and outs, and took hers at age 66.

Yep they will send you the paper work a 1099 of some kind.

Don't remember the number.

They are real good at getting it to you.

I started drawing as soon as I became eligible. Waiting is a gamble,......bird in the hand and all that.

The main consideration is cash flow at the future date. It is better to deal with low cash flow at a younger age rather than older age. You will receive about 25% more if you wait to your full amount date. Your COLA increases will be based on a bigger number. Retirement income is a mosaic at best.

Tomorrow is a promise to no one.

I turn 62 in a few weeks. Applied, approved and will have the 1st deposit on April 8. I'd have to wait until 66 years and 8 months to get full benefits. As it is I'd have to live to 78 in order to break even. Between my wife and I we'd have earned more than $200K before we even started at age 66 and 8 months. If I lived into my 90's is the only way I'd see a significant increase in overall income over starting now. I'll take my chances and can have a lot of money invested before waiting for the full amount. If I die before age 78 I come out ahead by taking it now. It is almost 30% less money starting at age 62, but in my case I get a 5year head start. For those who can start at age 65 it might be a better deal to wait.

If you continue working and earn over a certain amount your benefits are reduced further. I'm think it is around $20K/year. That only applies to those under full benefit age. If I wait until I'm 67 I can earn all I want and still get SS without reduction of benefits.

Very few people will have to pay tax on SS. If you ever worked in a place where they did not take SS out of your pay then you will. This only applies to a handful of government jobs, or for income earned overseas. There are a few school systems that do not deduct SS from wages. Those teachers will have to pay some tax on their SS depending on how many years they worked.

My parents both retired at age 62 and lived well into their 80's and never paid any tax on their SS benefits.

I started taking mine at age 62. It would take several years to make up the difference if I had waited. I had a real good friend who was a few years older than I waited until he was 65. He died 2 1/2 months later unexpectedly. If you know that you are not going to die until age 85 or 90 and don't have any need for the money when you are 62, then wait. Also, while you are at it, go ahead and cancel your life insurance. You know when you are going to die, right? Seriously, see what the difference is between taking it now and later and calculate how long it will take you to break even. Are you very sure that you will live at least that long? I am not asking do you hope so, but are you reasonably sure? Then remember, to reap the benefits of taking the chance on waiting that long and living X number of years for the extra amount to equal the number of extra years you waited for it to catch up or even out, your extra benefit payment years only then start. So, if you should live two or three years after the "catch-up" date is passed, is it worth taking the chance for the extra money gained? That answer, along with your particular situation, is what you need to make a good decision on what to do. YMMV. Best retirement wishes!

https://www.ssa.gov/planners/retire/whileworking.html

I think you better research those 2 statements a bit closer. The limit is 18,240.

And yes your SS can and will be taxed if you don’t watch it.

https://www.ssa.gov/planners/taxes.html

file a federal tax return as an "individual" and your combined income* is
between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
more than $34,000, up to 85 percent of your benefits may be taxable.

file a joint return, and you and your spouse have a combined income* that is
between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
more than $44,000, up to 85 percent of your benefits may be taxable.

Started at 66, still working for a little longer. I have my SS going into a separate account, because I didn’t have it taxed. That money shows up the second Wednesday every month.

Thank you for the replies

^^^ this . . . for Federal (IRS) income tax return only. SSA benefits are condsidered "income". Your state may or may not tax SSA benefits.

A spouse and / or ex-spouse(s?) can draw a SS benefit in the amount of approximately half of primary recipient's as long as they were legally married at least 10 years.

Upon the death of the primary recipient a spouse / ex-spouse can draw SS benefits off the primary's SS equal to the deceased's full benefit in lieu of their own depending on whichever is greater (also if married at least 10 years).

When one spouse dies, it can be a relatively substantial percentage drop in total monthly income for the living spouse with the loss of the deceased's SS benefit which could be a worthwhile reason for some to put off drawing SS as long as possible for the larger benefit.