Hi All,
Been mostly lurking here for the past few years. Getting close to retirement at the age of 62 -- about 3 months to go, but about 8 wks of that is vacation time I must use up before my official retirement date. Wife is retired, but only 60.
In any case, I have a question about royalty income and SS.
My original plan was to file for SS at age 62 just after retiring. Yes, yes...I know the penalty and arguments associated with that. Both my father and wife's mother passed away within just months after filing, so it's more of an emotional thing that has affected our thinking to a fair degree. Plus being at the end of the baby boom generation we want to get into the system before Congress decides to change things. That given, there is no need to address the early filing for SS point in your replies. Not so much that we need the income now...just wanting to make sure we get something before either: 1. death takes one of us or 2. Congress screws us. Any income we get from SS will mostly be play money, invested, and/or allow us to sit on our nest egg for a bit longer until RMDs slam us a bit further down the road.
However, I do receive royalties from licensed IP associated with my job (my employer holds the patents, I receive a portion of the license fees). Not a huge amount, but it is likely to increase given that we filed four new patent applications a few months back and are engaged in discussions with a prospective licensee.
My question is -- how are royalties treated for SS purposes? If they are treated as "earned" income (I will be retired, so no longer "working"), that would argue against filing for SS until I reach FRA. If royalties are considered "passive" income, I believe they would not affect SS.
As with most IRS rules...I can find information which seems to support both ways (earned or passive).
Been mostly lurking here for the past few years. Getting close to retirement at the age of 62 -- about 3 months to go, but about 8 wks of that is vacation time I must use up before my official retirement date. Wife is retired, but only 60.
In any case, I have a question about royalty income and SS.
My original plan was to file for SS at age 62 just after retiring. Yes, yes...I know the penalty and arguments associated with that. Both my father and wife's mother passed away within just months after filing, so it's more of an emotional thing that has affected our thinking to a fair degree. Plus being at the end of the baby boom generation we want to get into the system before Congress decides to change things. That given, there is no need to address the early filing for SS point in your replies. Not so much that we need the income now...just wanting to make sure we get something before either: 1. death takes one of us or 2. Congress screws us. Any income we get from SS will mostly be play money, invested, and/or allow us to sit on our nest egg for a bit longer until RMDs slam us a bit further down the road.
However, I do receive royalties from licensed IP associated with my job (my employer holds the patents, I receive a portion of the license fees). Not a huge amount, but it is likely to increase given that we filed four new patent applications a few months back and are engaged in discussions with a prospective licensee.
My question is -- how are royalties treated for SS purposes? If they are treated as "earned" income (I will be retired, so no longer "working"), that would argue against filing for SS until I reach FRA. If royalties are considered "passive" income, I believe they would not affect SS.
As with most IRS rules...I can find information which seems to support both ways (earned or passive).
