Richard8655
Recycles dryer sheets
- Joined
- Oct 11, 2010
- Messages
- 114
I know there's a lot of controversy over this, and everyone's situation is different. But I was running my numbers, and in my case it seems taking social security early at 62 rather than waiting to 66 makes more sense. But I'd like to see if there are any holes in this approach from members here that I might have missed.
First, I'm accepting that social security benefits over a lifetime are actuarially neutral (whether starting at 62 or 66). In my case, age 81 is the break even point. Who knows if I'll live longer than that or not. Assumimg 81 is my life expectancy, I'll recieve the same amount of money from social security whether I start at 62 or 66.
SS benefits start to be taxed when income reaches 32k per year. Half the benefits are taxed proportionally if total income is between 32k-44k (assuming only pension, investment, and SS income). Above 44k, 85% of benefits are fully taxed.
If my retirement income (pension, investment, and half my early SS benefit) equals around 32k, I wouldn't have to pay SS tax (or very little). If I wait to 66 for the higher benefit, I'll approach 44k and will then be taxed on 85% of my benefit.
In this case, doesn't it make sense to take SS early and avoid being taxed on the benefit? Anyone else encounter this? (As can be seen, I plan to live frugally on my income.)
First, I'm accepting that social security benefits over a lifetime are actuarially neutral (whether starting at 62 or 66). In my case, age 81 is the break even point. Who knows if I'll live longer than that or not. Assumimg 81 is my life expectancy, I'll recieve the same amount of money from social security whether I start at 62 or 66.
SS benefits start to be taxed when income reaches 32k per year. Half the benefits are taxed proportionally if total income is between 32k-44k (assuming only pension, investment, and SS income). Above 44k, 85% of benefits are fully taxed.
If my retirement income (pension, investment, and half my early SS benefit) equals around 32k, I wouldn't have to pay SS tax (or very little). If I wait to 66 for the higher benefit, I'll approach 44k and will then be taxed on 85% of my benefit.
In this case, doesn't it make sense to take SS early and avoid being taxed on the benefit? Anyone else encounter this? (As can be seen, I plan to live frugally on my income.)
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