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SS and working
Old 01-25-2014, 11:08 PM   #1
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SS and working

My sister in law asked me today if she is receiving her SS would that make her go into a higher tax bracket being she is working full time? She is age 67 and started drawing the SS as soon as you turned 67 last year. She said with her other job and SS it looks as though she will be moved into a higher tax bracket. Will it be taxed at the same rate as earned income. Thanks for any tips on this. oldtrig
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Old 01-26-2014, 01:31 AM   #2
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Some fraction of the SS ranging from 0 to 85% will be taxed at ordinary
income rates. The fraction depends on how much other income there is.
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Old 01-26-2014, 06:59 AM   #3
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Here's a calculator:
How much of my social security benefit may be taxed? | Calculators by CalcXML
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Old 01-26-2014, 08:52 AM   #4
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Why would she have started SS while working vs. waiting till retired or bigger payoff at age 70? Doesn't make sense on the surface.
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Old 01-26-2014, 09:41 AM   #5
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Why would she have started SS while working vs. waiting till retired or bigger payoff at age 70? Doesn't make sense on the surface.
I agree with you.

A former co-worker of my DW did the same thing, to get the maximum income that they (along with her husband) to cover the "good life". Guess what happened when she had to leave w*rk earlier than expected, after drawing her salary along with SS. Additionally, she started drawing at age 62, resulting in a permanent 30% reduction in SS for the rest of her life.

Some folks get used to spending what their income is, without regard to the possible future.
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Old 01-26-2014, 11:19 AM   #6
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Why would she have started SS while working vs. waiting till retired or bigger payoff at age 70? Doesn't make sense on the surface.
In my opinion it would be crazy to not start drawing SS at age 66 and still working. Its like free money because you can make all you want and still work. Waiting until 70 would not make that much difference in how much you receive per month. You may not even live that long. The only downside I see to this is a person might get used to making a larger amount of money per month if they start getting SS and working and when they retire get a big jolt. My SIL wants to work part time anyway after she retires and she is in good health. I cannot think of any other reasons to not start getting SS at 66. oldtrig
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Old 01-26-2014, 12:19 PM   #7
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My sister in law asked me today if she is receiving her SS would that make her go into a higher tax bracket being she is working full time? She is age 67 and started drawing the SS as soon as you turned 67 last year. She said with her other job and SS it looks as though she will be moved into a higher tax bracket. Will it be taxed at the same rate as earned income. Thanks for any tips on this. oldtrig
Depends on how much she earns from her j#b.

Benefits Planner: Income Taxes And Your Social Security Benefits
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Old 01-26-2014, 12:40 PM   #8
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In my opinion it would be crazy to not start drawing SS at age 66 and still working. Its like free money because you can make all you want and still work. ...
I did the analysis. For me, waiting is like buying an annuity with a COLA for a fraction of the cost of a commercial annuity. IMO that 8% per year increase is worth working the numbers.
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Old 01-26-2014, 01:16 PM   #9
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Waiting until 70 would not make that much difference in how much you receive per month.
That's a matter of opinion. To me, a 32% higher monthly check is a significant difference.
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Old 01-26-2014, 02:10 PM   #10
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That's a matter of opinion. To me, a 32% higher monthly check is a significant difference.
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Old 01-26-2014, 03:06 PM   #11
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Me too. And future increases are inflation adjusted on a consequently higher amount.
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Old 01-26-2014, 03:19 PM   #12
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Me too. And future increases are inflation adjusted on a consequently higher amount.

Bingo!!!!!
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Old 01-26-2014, 03:46 PM   #13
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Based upon mortality tables, you will receive the same total amount in SS independent of the age you choose to collect. You only "win" if you beat the tables.
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Old 01-26-2014, 07:44 PM   #14
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Based upon mortality tables, you will receive the same total amount in SS independent of the age you choose to collect. You only "win" if you beat the tables.

Absolutely correct. One's opinion of the number of remaining years trumps most of the other reasons to take or not take SS early.
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