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Started By
Message
re: Taking Social Security early vs. later
Posted on 1/26/25 at 8:14 pm to VABuckeye
Posted on 1/26/25 at 8:14 pm to VABuckeye
quote:
Correct about 67. The income limit to not affect your SS payment is $22320 for the year. Every $2 over that amount reduces your SS payment by $1.
That answer in space is a little misleading. Social Security is taxable income if your combined income from all sources (work, ira/401K, rent, etc) exceeds $25k for a single filer and $35K for married. It is truly f'd up. It leads to the situation that if person A gets $20K SS but pulls $30K from IRA, but person B gets $40K from SS but pulls $10K from IRA, the guy who gets only $20K from SS has way more taxable income.
Download the worksheets from the GOV and do the math, that is why I posted earlier about considering your total spending and taxes in future years. It's not a simple situation.
The reason it is skewed is because the taxable amount of your SS is based on combined income from all sources including SS. This amount is limited to 85%. Since both examples above have the same combined income, then the taxable amount of SS is the same, as long as it is still less than 85% of Guy A's SS. Then, their IRA distribution is added to their taxable income. Guy A has $30,000 in taxable distributions, guy B has only $10,000. Guy B pays a lot less taxes.
This is why Trumps desire to end taxes of SS is a big deal, but I'd rather see him reduce the Medicare premium for people who only have SS, because they have it harder due to the inflation adjustments not keeping up with actual costs.
You need to look at all of this stuff in detail.
1
Posted on 1/26/25 at 8:18 pm to CharlesUFarley
My comment about $22320 has nothing to do with social security being taxable.
It’s about the maximum amount a person that is drawing social security can make without their social security payment being reduced.
It’s about the maximum amount a person that is drawing social security can make without their social security payment being reduced.
This post was edited on 1/26/25 at 8:19 pm
Posted on 1/26/25 at 8:20 pm to VABuckeye
I agree. Just reading up and down the comments it seems like a lot of people don't understand all the tax implications of the original poster's question.
Posted on 1/26/25 at 9:29 pm to CharlesUFarley
I just cant fathom why the IRS puts a limit on how much you can make from age 62-67 if you start drawing SS at age 62. Boggles my mind.
I want to draw at 62 and still continue to work and make money. Why cant i do that?
I want to draw at 62 and still continue to work and make money. Why cant i do that?
Posted on 1/27/25 at 6:44 am to Double Oh
They don't want you taking it early and making over $22k without a penalty. It diminishes the larger pool of SS for others on it. It's all a numbers game. And you should look at your probable longevity. If people live to be 100 in your family, you should delay getting on SS as long as possible. For every year you delay your payment goes up 8%.
Posted on 1/27/25 at 8:06 am to RedlandsTiger
One small clarification on the 8% increase is that the delayed retirement credits are activated after the full retirement age (FRA).
This post was edited on 1/27/25 at 10:44 am
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