why you should ALWAYS take SS as soon as you can

[Texas Proud]

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Originally Posted by thinker25 Eeek. Since I am not married, the spouse issues don't exist for me. However, I did convert some IRA money to a Roth IRA this year - so either I pay big taxes in 2010 or more modest taxes in 2011/2012. However, the second scenario makes SS taxable... so do I wait or not... The everlasting question. I'm still trying to work the numbers - I decided NOT to take it at 62 (this month) because of all the issues around the IRA taxation. As soon as I can figure that out... when pigs fly?... Does anyone know when it gets adjusted for age? Specifically, does my age 62 SS amount stay the same until I turn 63 (and then become a larger benefit, if I haven't claimed yet)? Or do they pro-rate it depending exactly how old you are? Part of me just says take it and run and pay the taxes - it would make life much simpler in terms of cash flow. It would definitely increase my taxes.

From what I understand.... it changes per month, not per year...

So, you can wait until Jan of 2012...

[rayvt]

It changes by the month. Go to the SSA site and there's a place where it will figure it for you.

You can easily figure out what the tax implications would be. Just use the tax program you used for your 2009 tax, and put in a new entry for the SS would would have collected, then see how that changes your tax.

If you are still working it probably is a bad idea to take SS, because your SS gets reduced 1-for-2 for everything you earn over the threshold.

[DeborahB]

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Originally Posted by rayvt It changes by the month. Go to the SSA site and there's a place where it will figure it for you. You can easily figure out what the tax implications would be. Just use the tax program you used for your 2009 tax, and put in a new entry for the SS would would have collected, then see how that changes your tax. If you are still working it probably is a bad idea to take SS, because your SS gets reduced 1-for-2 for everything you earn over the threshold.

Thanks! I had looked there but apparently missed the month-by-month part. That helps, if I decide to take it in August or whatever. I'm quitting July 2, right after I turn 62, so work isn't an issue.

I have done, oh, 20? scenarios for upcoming years via tax program... sigh... it's complicated by the roth conversion. There are a lot of ways to play this. The cheapest in tax terms is to pay on the roth 2011/2012 and take SS after that. However... I have to come up with a lot of money to live on that SS would cover. It's messy.

The roth conversion still was a good idea, made a bunch of bond dividends - and bonds that are below par - not taxed later.

[Zoocat]

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Originally Posted by W2R To me, SS functions as (partial) old age insurance. If I die young, I didn't need it anyway because I had plenty in my portfolio upon which to live.

This makes a lot of sense to me as well. In addition, I plan to continue working part time until I don't want to anymore. So up until my official SS retirement age 66, I wouldn't be able to draw the full amount anyway as it would be reduced by 25%.

[rayvt]

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Originally Posted by thinker25 I have done, oh, 20? scenarios for upcoming years via tax program... sigh... it's complicated by the roth conversion.

I've never understood the attraction people have for paying taxes sooner rather than later.

The roth conversion scenarios are much easier when you keep one thing in mind: "If it's not worth doing, it's not worth doing well."

[teejayevans]

I will take it early, if I live a long time, I'm ok with that.
TJ

[Independent]

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Originally Posted by thinker25 Thanks! I had looked there but apparently missed the month-by-month part.

Did you look here? Early or Late Retirement

[DeborahB]

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Originally Posted by Independent Did you look here? Early or Late Retirement

Thanks, I hadn't seen that calculator. That's definitely a keeper and helps a lot.

[DeborahB]

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Originally Posted by rayvt I've never understood the attraction people have for paying taxes sooner rather than later. The roth conversion scenarios are much easier when you keep one thing in mind: "If it's not worth doing, it's not worth doing well."

I am looking at the total taxes I pay for the three years, depending on scenario, and also (depending how I do this) looking at what my assets are worth a few years later... It's complicated. I don't want to pay taxes sooner, more importantly don't want to pay more than is necessary. Ugh.

In my case, the roth conversion was worth doing. It's the tax decision that's driving me nuts. So I want to do it well and pay the least possible tax.

[endthefed]

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Originally Posted by haha Maybe you should have stayed with conservative investments like gold?

no kidding! i've also started nibbling on uga (gasoline) - so with my luck we'll all be filling up with $1 gas soon