SS @ 70 Poll, How much will U & UR SO Get, Please SS @ 70 Only, No External Pensions

[RetiredHappy]

My husband started his at 70 ($3,965 pm) and I will start mine at 62 ($1,596 pm). He contributed for almost 50 years while I contributed for 18 years. Total of $5,561 pm. If I wait until I am 70 to collect, which I won't, mine would be $2,810, making a total of $6,775. These are 2022 numbers. I am not getting the COLA bump, just the CWI increase.

[ShokWaveRider]

We only paid in for 25 and 23 years respectively. The reason is we only have been in the USA 31 years, I am originally from the UK and DW is from Canada.

[GalaxyBoy]

DW claimed at 62 but I plan on waiting until 70. But I voted for the number it would have been if we both waited. As it is, we will get about $5500 per month, so if she had waited it would have been over $6000.

[Retireby45ish]

I was just reading about taxes on SS. Anything over 44k of income for a couple gets taxed at 85%!!?

So, say, you have dividend income of 50k per year, you are in the 0 federal bracket.

But if you earn 50k in SS for that year you are only getting 7500 of that after taxes (you will pay 42500)

So you only have 57500 to spend? What a hit.

Do people try to keep their income low (not sure how if you have a big enough nest egg throwing off that 50k) ?

[MissMolly]

No. It means 85% of the SS amount is taxable in whatever tax bracket you are in 15% is not taxed). It does not mean they hold back 85% of the SS.

[Retireby45ish]

Quote:

Originally Posted by MissMolly No. It means 85% of the SS amount is taxable in whatever tax bracket you are in 15% is not taxed). It does not mean they hold back 85% of the SS.

Ah, I just looked through a few more sites. There is a lot of bad info on the internet. This makes much more sense to me.

Sigh of relief!

[Car-Guy]

^^^^^


Maybe you just misunderstood what you read or got info from someone that didn't have a clue about what they were talking about... Try the link below for the facts.

File a joint return,

• 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.

https://www.ssa.gov/benefits/retirem...ner/taxes.html

[pb4uski]

Quote:

Originally Posted by freedomatlast I agree. My age 70 benefit projection from SSA is also over $4,000/month, with all or almost all years earnings over the SS cap.

+1 28 years over the cap and my age 70 benefit on my SSA statement is $3,898/mo.

[Retireby45ish]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

[Mulligan]

Quote:

Originally Posted by ShokWaveRider I am surprised how many folks here (Think what ER means), have their SS so high. We retired twice, the first time when we were at 48 and 43 respectively. We did go back to work after our travels for a few years but not enough to fully pay into SS.

You wont think mine is too high. I will net about $250 a month if I wait until 70 to collect. Im a WEP/GPO victim though, and mostly had various Mickey Mouse jobs over the years including HS and college as my career did not contribute to SS.

[REWahoo]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add?

If you already have 40 quarters/credits, working an additional year won't add much - probably in the range of $50/month.

[finnski1]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

No. But I have about 10 years or more of 0 income and I'm not going back

Seriously though I am not sure it would add that much unless you maybe only had 10-12 years of actual income to qualify in the first place.

[truenorth418]

Waiting to 70, $3,618/mth.

[ShokWaveRider]

I would conclude from this poll that a lot of us have a significant investment in SS. For us anything over $2k a month is very helpful as to run our home on the average month including RE Tax, HOA, Utilities and Food is ~$2k a month, and we have a $3,300sqft home.

Leaves the nest egg and anything over $2k (for us) to cover all the other things like Maintenance, Healthcare, Cars, Vacations etc. that we need for a comfortable RE.

[Gumby]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

Your primary insurance amount (PIA) is the benefit you will receive at your normal retirement age (67 for those born in 1960). It is calculated based on your inflation adjusted average monthly earnings over the highest paid 35 years of your career, and it consists of three separate amounts: to wit, 90% of the first $1024; 32% of the amount between $1024 and $6172; and 15% of the amount over $6172 (this last amount is sometimes called the second bend point).

Let's assume that you are just at the second bend point right now, so your inflation adjusted average monthly wage is $6172, and you have exactly 35 years of earnings. So your monthly SS benefit at 67 would be (0.9 x 1024) + (0.32 x (6172-1024)) + (0.15 x 0) = $2569 per month. Now let's assume that in 2022 you earn and pay SS taxes on the maximum social security covered wage of $147,000. That is $12,250 per month and it will increase your average monthly wage by (12,250 - 6172)/35 = $173. Your PIA will increase by $26 per month (173 x .15).

To summarize, if you are at the second bend point and you max out social security wages next year, you increase your benefit by $26 /month or $312 per year. Obviously, if your average monthly earnings were over 6172 ($74k per year), the benefit of that additional year would be 15 cents less for every dollar over the second bend point. And if you earned less than the max social security amount of $12,250/mo ($147k per year) in 2022, it would be 0.4 cents per dollar less per month.

You can tinker with the average monthly wage and the amount you expect to earn in 2022 and see how that changes at various points. But the bottom line is that once you get 35 years in, additional years do not really add much to your benefit.

[Andre1969]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

My guess is that it would depend on how many years of employment you already have under your belt. If you already have 34 years in, and OMY puts you to 35, that's the final zero knocked out. Probably not much difference, even if your salary is over the cap.

Plus, there's those SS "Bend Points", where it's designed to cover something like 90% of your wages up to around $12K per year, 30% from $12K-60K, and 15% from $60K to the max. So once your taxable earnings are consistently above that second bend point (where it drops from 30% to 15%), I imagine a higher income really doesn't help much at all. Now I'm just guessing on these exact percentages and bend points, so the reality is most likely different, but I'm probably not that far off.

Now, if you only have 20 years of employment in, which would mean 15 years of zeroes in the calculation, then OMY would have a greater effect on the outcome.

I think most of the big increases in SS later in life come from delaying collection of it, moreso than actually working longer. For instance, according to my SS statement, I'll get about $1841/mo if I collect at 62, and $3312/mo if I wait until 70. However, I've run my numbers through the SS quick calculator, and if I was to quit working now, I'd still end up with about $1500/mo if I started collecting at 62.

So, an extra 11 years of working only bumps it about $350/mo. From there though, delaying a year bumps it up by 7% per year, until my FRA (67) and then 8% per year for each year until I hit 70. I think it's simple interest though, and not compounded.

Anyway, according to my calculation, which could be off, if I'm getting $1500 at 62, it should be $2025 for 67 ($1500 plus five years worth of $105 (7%) increases). And then at '70 it should be $2385 ($2025, plus three years worth of $120 (8% of the $1500) increases.)

If that 8% is based on my FRA amount, though, rather than the age 62 amount, I'm estimating $2511 ($2025 plus three years worth of $162 (8% of the $2025) increases.)

In my case, while I just hit 35 years, many of those were low-income years. So working longer would replace some of those years, and boost it somewhat.

[Alan]

Quote:

Originally Posted by ShokWaveRider I am surprised how many folks here (Think what ER means), have their SS so high.

For couples where the primary earner is older it makes sense to wait until 70 to essentially get some insurance on income for the survivor. My wife and I both retired at 55 but her SS is much less than mine as she didn't pay in for nearly as many years (16 years versus my 28). She is also younger, fitter, and with a family history of long lived parents and grandparents. I'll start my SS at 70 as the odds are that I will die first and her income drop will only be her own SS as she will get the higher of the 2.

The 15 years between 55 and 70 has also given me time to do Roth conversions at lower tax rates (without the extra income of my SS).

[rothlev]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

I would think 3% . SSA is based on 35 years, so 34years with one zero is 97% of your hypothetical benefit.

[RetiredHappy]

Quote:

Originally Posted by rothlev I would think 3% . SSA is based on 35 years, so 34years with one zero is 97% of your hypothetical benefit.

Not so. SS is regressive. The more you make, the less your earnings impact the benefits, as explained above by Gumby.

[USGrant1962]

Quote:

Originally Posted by Retireby45ish Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

This tool can tell you using your own earnings record. It is very flexible for playing with OMY.

https://ssa.tools/