With the retirement income I get when 62, no way can I travel how I want to travel.
When they deduct $1 for every $3 earned above a specified limit, do they mean only earned income (salary, commissions and the like) or does it include pension payments?
It’s complicated. It also is important to factor in other assets as well – both cash & hand and money in other retirement accounts. Some people are relying on that SS check for day-to-day living expenses; others may be looking at simply banking it, or choosing whether to take SS or start pulling from a 401K. As interest rates start to go up, the equation will also change on the value of the banking it part. I think that if I were wealthy, I’d be more inclined to start taking the money sooner rather than later - not before hitting the full retirement age, but certainly by age 67. Because then I wouldn’t be worried about where I will be at age 90… the SS check would just represent more cash inflow. And I wouldn’t be worried about being a burden to my kids if my SS check wasn’t enough to meet my needs down the line.
Appreciate this thread, it prompted me to print out our statements from the ss.gov site since they don’t mail them anymore. Does maxing out pre-tax contributions to a 401k or 403B reduce social security earnings later? The annual income listed in the SS earnings column is the amount after pre-tax contributions, while the income shown for Medicare earnings is the amount before retirement account contributions.
Do “free” financial planners at brokerages (i.e. Schwab or Fidelity) have software to do these estimates?
@techmom99 - earned income only. and I think it is $1 for every $2. Edited to add - guess it is $1 for $3 the year you reach FRA and $1 for $2 in earlier years!
Thanks, I will confirm as I get closer but I have a pension from a former job that maxes out at 65, so I will start taking it then regardless of what else I do. I will probably max out my 401 (k) and start a Roth to account for the increase in income, but again I will decide specifics as I get closer to 65. If I am still working at 65, I won’t take SS.
Actually now I’m confused, lol. I thought I was good for next year cause I won’t make $45,360 before I reach FRA in May. But looking at the SS web site, it looks like they claw back based on going over a monthly income limit of $3,780 which I would be over. So I would lose 1/3 of the excess over $3780 for that 4 months? I hope I’m misunderstanding 
Judging by my wife, I think they do it on a yearly basis rather than monthly, but I cannot swear to that.
I earned too much one year…and had to pay back my full SS benefit of…$2020. I earned more than $45,000 for the YEAR. It is not done monthly. It’s the year.
Would trust fund run out of money change any projections?
You don’t “lose” anything if SSA “takes it back.” Yes they take it, then at FRA they give it back to you in this way:
Any month when they didn’t pay you, they will add as a month later that you began to draw. It’s hard to explain, that’s why so many ppl think you lose that money.
Here’s an example.
You start drawing SS at age 62. Your FRA is 66. From 62 to 66 you still work and you “lose” 10 months of benefits every year. At age 66, SSA does an accounting of those 40 “forfeited” months, and recalculates your retirement age to be 65 years 4 months. They recalculate your monthly benefit as if you actually retired at age 65 yrs 4 months for all benefits going forward.
Things to note:
They withhold benefits by full months based on past and projected earnings. If they are withholding 10 months of benefits it means you will get NOTHING for 10 months and then will receive benefits for Nov & Dec.
I chose to go this route so that I would already be on the rolls if they started messing with SS. I actually wanted to earn enough for them to withhold all or nearly all of my benefits but as things worked out I only “lost” a few months of benefits each year. No one had warned me that I would forego benefits for four solid months and then get a full benefit for the rest of the year. You have to be a good planner and budgeter.
Your continued earnings will also help increase your SS benefit each year.
@alooknac is correct. 2017 was the year of my 66 birthday. I got a nice love note from SS giving me a raise…and I also got a lump sum deposit in September because I worked in 2017…and contributed to SS.
My net deposit went from $3 a month…to $10 a month (the rest pays for my Medicare bill). Woohoo!
@“cincy gal”
^ I have and found it to be accurate. but I have also used MaxiFi, which is run by the same Prof who started maximizemysocialsecurity.com, which gives me more options to run different retirement /investment scenarios
The posted calculator told me to take SS at 69 and 9 months. Ha! I’ll be retiring early and taking it at 62. Who knows if I will live to see 69. Many in my family haven’t. Others have lived to over a 100. I’m not a gambler.
One problem with the retirement calculator at the SSA (https://www.ssa.gov/planners/retire/AnypiaApplet.html) is that you can’t create a scenario where you reach a certain age, lose your job, and then must assume you will receive a much lower rate of pay thereafter, until you choose to take your social security benefit.
I can’t assume that I will continue to make what I am making now until I turn 66 or 70, and that is true for the vast majority of Americans.
This thread has certainly got me thinking…I’m 60, and work PT with a fairly decent salary (for PT). Everything I’ve read to date seems like drawing starting at 62 works in my favor. Seeing this disclaimer on the Social Security Statement is an eye opener: * Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits.
i will turn 70 in January and will start taking Social Security but I still plan to continue working as a mentor in my position in educational sales mainly because I like what I do and I can still do it until I no longer want to do it. I am going to speak with management in my company this week about that transition and how I will be compensated. I spoke with the President of my company who told me that he can/will be very flexible and that “70 is the new 60”. I will make an appointment with Social Security to see what is the max that I can earn as my DH says that it is better if I don’t earn too much. He is older than me and as a retired Senior Federal Executive, earns a fine pension, so SS and he does have to take annual distributions from IRA’s and so on. I have been receiving income from inherited IRA from my mother as do both of my daughters.
One of the above posters said that Social Security doesn’t send printed information but they have consistently sent me printed statements showing what my retirement income will be if I were to retire at various ages.
If you are 70 years old, there is no upper limit on the amount you can earn per year. You can earn a lot and it won’t affect your SS benefit.
I believe that limit is for age 65 and under.
A quick search turned up that there are income limits for below your FRA and higher limits for between your FRA an age 70. @bookmama22 it is still probably prudent to have the conversations you’ve planned to help see your whole picture. Congrats on the job you love and the planning that must have gone into getting to the space your in! Hope to be there someday.
I ran this by my older brother the actuary [who just turned 70, for that that’s worth]: “The textbook advice is delay to 70 unless you are really pessimistic about your life span. Of course, if you need the cash flow, it’s a good low interest loan to take it early. I worked for a year with Robert Myers, who designed the system. He explained that he wanted to compel folks like us to delay to FRA, and to encourage us to wait to 70.”
My plan is to run the numbers and see how the “bonus” pans out and how many years past 70 I’ll need to live to take advantage of it and probably revisit the question each year based on how I feel about my health. Dad died at 68 and Mom at 96, and grandparents in late 70s to early 80s, so I’ve got varying scenarios but generally a family history of stretching things out. [I used to love watching the annuity payments into Mom’s bank account each month as she beat the mortality tables again & again. Only time the family ever bet against “the house” and won.]