Brett_Cameron
Thinks s/he gets paid by the post
We have well over 10 years of credits due t lots of work for both of us during high school and college,...
IIRC credits start after you turn 21.
We have well over 10 years of credits due t lots of work for both of us during high school and college,...
IIRC credits start after you turn 21.
Yes, I am chicken!
I started paying Social Security taxes when I was 16 years old.IIRC credits start after you turn 21.
I assume you are doing this by using the option on the "Investigate" tab, "Leave some money in the portfolio for my estate". This is critical IMO because most of us would be very worried indeed if our current portfolio dropped to some small fraction of the current....(snip)...
2) I now tell FIRECalc that I am willing to reduce my spending such that during the 30 years, my portfolio will never drop below 1/3 of its initial value, and I still get no SS. FIRECalc tells me that I can spend only 91% of $X above.
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IIRC credits start after you turn 21.We have well over 10 years of credits due t lots of work for both of us during high school and college,...
Whew. I know that children younger than 21 doing household chores for a parent are also exempt from paying FICA.I don't think your statement is accurate. The only age exception I saw was earnings don't earn SS credits for "Children younger than age 21 who do household chores for a parent". I know my SS statement reflects the earnings from the years I was age 15-21, and I earned 4 credits each year for the most part. All of the "you will get $X,XXX when you retire or if you become disabled" are based on the inclusion of my earnings from age 15-21.
Although in the grand scheme of things, it is only of minor importance since my earnings from age 22-present are much greater than from ages 15-21, and my post age 21-earnings represents in excess of 40 credits. The marginal benefit of the age 15-21 earnings are maybe $1000 a year in SS payouts at FRA.
Whew. I know that children younger than 21 doing household chores for a parent are also exempt from paying FICA.
In our daughter's case, this little income niche has been fueling her Roth IRA for over five years.
I don't think your statement is accurate. The only age exception I saw was earnings don't earn SS credits for "Children younger than age 21 who do household chores for a parent". I know my SS statement reflects the earnings from the years I was age 15-21, and I earned 4 credits each year for the most part. All of the "you will get $X,XXX when you retire or if you become disabled" are based on the inclusion of my earnings from age 15-21.
Although in the grand scheme of things, it is only of minor importance since my earnings from age 22-present are much greater than from ages 15-21, and my post age 21-earnings represents in excess of 40 credits. The marginal benefit of the age 15-21 earnings are maybe $1000 a year in SS payouts at FRA.
See this from the Social Security handbook:
SSA Handbook § 704
Quote:
"Under the usual formula, “elapsed years” begin with those calendar years after 1950, or after you turn 21, if this is later and end with the year before first eligibility (or death if earlier). "
"For retirement insurance benefit purposes, elapsed years are those calendar years after 1950 up to the year you turn 62.
Example: An insured worker turned 62 on December 2, 1994, and filed his application for retirement insurance benefits on January 3, 1995. There are 40 elapsed years, counting the years from age 22 through 1993. The number of “computation years” is 35 (40 minus 5)."
This is how elapsed years are used in computation of benefits:
SSA Handbook § 703
This is the basis of my statement that years before age 22 don't count.
Your base years are the years after 1950 up to the year of the first month you become entitled to retirement or disability insurance benefits. For a survivor's claim, the base years include the year of the worker's death. A year wholly contained in a period of disability is not included in the base years. Years partially within a period of disability are included.
Example: Mr. Clifford applied for retirement insurance benefits in October 1995. He is found entitled to a reduced benefit beginning October 1995, the month in which he is age 62 throughout the month. His base years for purposes of the initial computation of his benefit rate are the years 1951 through 1994, the year before the year in which he became entitled to benefits (1995). Since the elapsed years are 40 (1955 through 1994, the year before he attains age 62), the computation years are 35 (40 minus 5). To find the PIA, the earnings are averaged over the 35 highest of the base years 1951 through 1994 after the earnings are indexed. Mr. Clifford's PIA may be recomputed to take into account any earnings he had in 1995. This increase, if any, in his retirement insurance benefit will be effective January 1996.
yep, I was confusing "base years". "elapse years" and "computation years". I am glad I was wrong and thank you for correcting me!The age 21 is only relevant in determining computation years, which will be 35 years for everyone looking to ER today (ie those turning 21 on or after 1950, which means being born after 1929).
Then Section 705 defines "base years", or the years that SS looks at to determine your PIA.
Note the bolded section in the quote. No limitation based around age 21 or anything. Any earnings after 1950 fall in the base years, and they look at the highest 35 of those base years (indexed for inflation by the wage growth factor IIRC).
yep. Only relevant if you do not work until age 62.
After reaching age 21, though, the IRS says that if you're working for your parents they have to start contributing FICA for your wages.I don't think age 21 means anything in terms of what earnings history SS looks at.
It seems I was editing my last post as you were replying. You are correct and I was confused.
Yes, I withdraw 3.5% every year but I don't end up spending all of it.
Only if they are paying you and not required to w*rk for the "good of the family" (been there, done that) ...After reaching age 21, though, the IRS says that if you're working for your parents they have to start contributing FICA for your wages.
Who suggested otherwise? So do all the credible SWR studies, for example: